COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE OF THE WHOLE3 Room 400, City Hall6 Philadelphia, Pennsylvania Tuesday, March 29, 20117 10:10 a.m. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA10 COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL CLARKE11 COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN BILL GREEN12 COUNCILMAN WILLIAM K. GREENLEE COUNCILMAN CURTIS JONES, JR.13 COUNCILMAN JACK KELLY COUNCILWOMAN DONNA REED MILLER14 COUNCILMAN BRIAN J. O'NEILL COUNCILWOMAN BLONDELL REYNOLDS BROWN15 COUNCILMAN FRANK RIZZO, JR. COUNCILWOMAN MARIAN B. TASCO16 BILLS 110135, 110136, 110137 and 110138 RESOLUTION 11016118 - - -20 2
Good2 morning. This is a continued public3 hearing of the Whole.4 The Chair recognizes5 Mr. McPherson.6 MR. McPHERSON: Continuation7 hearings of Resolution 110161, the City's8 Five Year Plan; Bill No. 110135, Capital9 Program, 2012 to 2017; Bill No. 110136,10 the Capital Budget for 2012; Bill No.11 110137, the Operating Budget for 2012;12 Bill No. 110138 for the wage tax. And13 we're taking testimony today on Bill No.14 110137, the Operating Budget for Fiscal15 2012.16
First17 department.18 MR. McPHERSON: The first19 department is the Division of Technology.20 (Witnesses approached witness21 table.)22
Good23 morning. Welcome. Kindly identify24 yourself for the record and proceed with25 3/29/11 - WHOLE - BILL 1101371 your testimony.2
Good morning,3 Council President Verna and other members4 of Council. I am Thomas T. 12 The Division of Technology is13 in its ninth month of the consolidation14 of all technology under one centralized15 group and leadership. During this16 period, we have brought together the17 personnel and budgets of 29 consolidated18 agencies and seven MOU agencies into one19 family. 22 The Mayor has stated a minimum goal of 2523 percent OEO participation in government24 contracting, and the Division stated in25 6 3/29/11 - WHOLE - BILL 1101371 last year's testimony that we had an2 internal stretch goal of 35 percent. To3 accomplish this, the executive team has4 taken the challenge on personally, having5 collectively met one on one with over 306 OEO-certified firms so that we might get7 to know the community and the8 capabilities and the capacity it9 represents. Furthermore, we have10 participated in and/or sponsored events11 that both reach out to and help connect12 OEO vendors with large companies. For13 example, the team worked through the14 Pennsylvania Minority Business Enterprise15 Center to promote events such as the IT16 Summit held on July 14th, 2010 and17 Pennsylvania Minority Business Enterprise18 Center-sponsored information sessions on19 March 9th, May 4th and November 12th of20 2010. And the work has paid off. For21 example, in FY09, our awards were just22 under 20 percent. In FY10, they were 2523 percent. 25 7 3/29/11 - WHOLE - BILL 1101371 With three months left in the fiscal2 year, we believe we will achieve our 353 percent target. 8 While executing the9 consolidation without impacting10 day-to-day operations has proved11 challenging, the strategy has also12 produced efficiencies and improved our13 effectiveness. 16 In addition to the above, we17 have also been diligently investigating18 other ways to generate efficiencies. For19 example, we are in ongoing discussions20 around enterprise licensing agreements21 for our databases, document management22 tools and office automation suite. We23 have been investigating a number of24 managed service offerings for things like25 9 3/29/11 - WHOLE - BILL 1101371 phone service, centralized printing and2 other specific applications. We are also3 reviewing cloud computing services for4 such things as secondary or tertiary data5 center locations to better meet the6 requirements of Department of Homeland7 Security, as well as our own Disaster8 Recovery and Continuity of Operation9 plans. 12 We are proud of our13 accomplishments to date and we have14 managed through significant challenges in15 order to achieve them. For example,16 underway is the conversion of our current17 e-mail system to a newer, more modern one18 for all agencies. Over the last few19 months, we have piloted this new e-mail20 system for all of the Division's 123421 Market Street location personnel and22 several staff in the Managing Director's23 and Mayor's Office. 2 Additionally, in the coming3 months, the Division will work with the4 City leadership as we complete a citywide5 prioritization of over 300 IT projects in6 conjunction with the Managing Director,7 Deputy Mayors and department8 Commissioners. This process will align9 technical projects with the Division's10 and departments' tactical and strategic11 needs to better focus our IT resources12 where they are needed most. To do this,13 we consider over 20 factors, such as14 whether it affects public safety, whether15 it is revenue generating, whether16 external funds are available, whether it17 is a legislative or mandated initiative,18 whether the current system is unstable,19 whether it impacts multiple groups and20 whether the current support staff are21 projected to leave the City within the22 next four years. 2
Thank3 you very much. I see just about all of4 my colleagues have their lights on, but I5 would like to start with a few questions.6 The Division of Technology's7 Operating and Capital Budgets have8 material increases in Fiscal 2011. One9 of the issues that these funds would10 address was the City's Internet access.11 It appears that Internet access continues12 to be a problem. Can someone explain why13 we are still having a problem with the14 Internet, what is going to be done and15 how are we going to correct this problem?16
Sure. This has17 continued to be an ongoing issue, and we18 know it's a source of great19 dissatisfaction with a number of people,20 but the reason the Internet speeds have21 been what they are is because the City22 actually only has one very low-speed23 connection. We have ordered and have in24 place two additional connections that are25 13 3/29/11 - WHOLE - BILL 1101371 about, I think, 18 times as fast. We2 have also -- or will have by next week --3 placed an order for the equipment to4 handle that. So in order for us to5 increase it, we have to pay the6 communications company for a faster7 connection and we have to put about a8 half a million dollars worth of equipment9 in to handle all the City needs.10 We hope to have -- we11 identified it. We specked it out. We12 know what we need, and hopefully we will13 have those orders placed by next week.14 So we anticipate sometime in the next 6015 days, assuming every piece of equipment16 is already on a contract, you know, all17 of those types of variables, that you18 will start to see an increase in your19 speed in the Internet.20
The23 Chair recognizes Councilman Rizzo for a24 point of information.25 14 3/29/11 - WHOLE - BILL 1101371
If in fact5 we're not on the 60-day track, couldn't a6 temporary relief to this problem be that7 we use one of the providers, like Comcast8 or Verizon? We have a lot of wires from9 them coming to this building and other10 City buildings. Why couldn't that be11 temporary relief since they have the12 infrastructure that could be helpful? I13 mean, I just can't imagine how we even do14 business here, with the quality of our15 e-mail, our quality of our Internet16 service.17 So I think you really need to18 pursue especially the hot spots, maybe19 the Police Department, maybe other places20 that temporarily they need to be on an21 outside provider. I'm sure the22 securities can be filled in to provide23 what you need.24
Great suggestion.25 15 3/29/11 - WHOLE - BILL 1101371 We've looked into that suggestion several2 times before. We are at a point now --3 we still have to bid those things out,4 who gets to be the provider, because5 there are more than one provider. At the6 rate we are now, we are literally sitting7 there with equipment about to be ordered8 to solve the problem, and we feel that it9 makes the most -- it's both the fastest10 and the most economical for the City.11
Well, I do12 believe that Comcast already by our code13 provides some TV service as part of14 the -- forgive me for not knowing the15 exact words -- the deal that we have with16 them, that I'm sure that if we approach17 them and told them that the belt is18 bursting here, that we need some relief,19 I'm sure that they would work with us,20 especially in areas of government that21 are in serious trouble, as we've been22 hearing for months and years.23 Thank you, Madam President.24 COUNCIL PRESIDENT VERNA:25 16 3/29/11 - WHOLE - BILL 1101371 You're welcome.2 Your department is projecting3 to receive $21.5 million in cable4 franchise fees for FY 2011, which is5 being reduced to $17.6 million in FY6 2012. Can you explain this reduction?7
President Verna,8 I'm going to ask my Deputy CIO for9 Communication, who is intimately involved10 with that, to come up.11
Thank12 you.13 (Witness approached witness14 table.)15
Good morning,16 Council President. My name is Joseph17 James, Deputy Chief Information Officer18 for Communications and Operations.19 The reduction in the cable20 revenues is, a late payment we received21 in this fiscal year boosted that number22 to the $21 million, and what we've done23 is reset the number back to what it24 should be at $17 million. That's what's25 17 3/29/11 - WHOLE - BILL 1101371 in next year's budget.2
Again6 on of your budget detail, you7 show an increase in FY 2012 of $1.38 million to Verizon for telecommunication9 services. Can you explain what these10 additional funds are going to be used11 for? of the budget detail.12
Council President,13 that was a shift of money from one14 division within Division of Technology's15 budget, from our Core budget into the16 Communications area of the budget.17
The20 Chair recognizes Councilman Green for a21 point of information.22
I'm sorry.23 Can you be more specific about that? I24 don't follow that response.25 18 3/29/11 - WHOLE - BILL 1101371
While they look up2 that, Councilman Green, the exact line,3 as part of the reorganizing and4 consolidating, we have the four separate5 groups within the Division:6 Communication, Department, Core. And so7 as part of the budget process, we tried8 to make sure that the right dollars were9 in the right group.10
I11 understand, but it shows Fiscal 201012 obligations of ten eight nine five,13 estimated obligations for '11 of eight14 five nine and then Fiscal 2012 obligation15 level going to nine eight two eight, all16 in the same line item on , Section17 21. So I don't understand the response,18 because it doesn't appear to be accurate,19 but I'll come back to this in my20 questioning if you're looking for it --21
-- so that I24 don't hold people up.25 19 3/29/11 - WHOLE - BILL 1101371
As2 we're looking at Section 21, , it3 doesn't show anything as far as increase4 or decrease as far as an internal5 transfer. Would you like to see the6 page?7
Madam President, as8 you can tell, part of the consolidation9 as we've had to try to right size some of10 these, some of the numbers sometimes get11 split. If you would indulge us, I'd like12 to take the question and get you a13 detailed answer, get back to you with a14 detailed answer.15
I'd19 like my sheet back. Thank you.20 And you'll get back to us in21 writing, if you will?22
We're24 going to continue on.25 20 3/29/11 - WHOLE - BILL 1101371 On of your detail,2 under the heading of Electric Current,3 $387,000 in FY 2012 for PAID. Can4 someone explain why we are paying PAID5 for electrical services?6
The $360,000 that's9 in the PAID line item on is part10 of the cost for when we acquired the11 EarthLink network.12
When we acquired15 the wireless network from NAC last year,16 part of the bill that was introduced was17 to move the leases that was associated18 with that and the electric charges19 through PAID, so that we're actually20 using PAID as the entity who is actually21 paying for the leases and the electric22 charges.23
On24 of your detail, you're requesting25 21 3/29/11 - WHOLE - BILL 1101371 $582,549 for PAID for lease purchases.2 Can someone give us a breakdown as to the3 items being lease purchased, the length4 of the lease and its terms and5 conditions, and I'd like to know was this6 lease approved by City Council, and, if7 so, when?8
It was last, I9 believe, May of last year when we10 introduced the bill for the acquisition11 of the EarthLink wireless network. There12 was two bills. One was for the actual13 purchase, which I believe the14 authorization was around $2.5 million,15 and then there was also a transfer of16 those leases for -- they were long-term17 leases that NAC inherited from EarthLink18 that was transferred over to PAID. So19 there was a number of items in those20 ordinances, which had the list of all of21 the locations. There was approximately22 25 sites that were in that, and some of23 the leases were, I believe, three to five24 years in length. But we can provide you25 22 3/29/11 - WHOLE - BILL 1101371 the actual detail and the Council bills.2
Would3 you put that in writing and forward it to4 me, please.5
I7 would like to give my colleagues an8 opportunity to ask questions.9 Councilman Green.10
Thank you,11 Madam Chair.12 Good morning. Thank you for13 your testimony.14 How long have you been on the15 job now as Acting CIO?16
Good. Well,21 there's a lot to do there, so I'm glad22 somebody is directing this.23 Was your department asked to24 prepare one and a half and three percent25 23 3/29/11 - WHOLE - BILL 1101371 budget reduction scenarios?2
Thank you.4 I'll get them from the Administration5 when they provide them. I just wanted to6 know.7 So I'd like to get to some8 questions I couldn't ask during the9 Capital hearing, and, that is, the10 Capital Program included 120 million11 investment in technology over six years,12 with 75 million front-loaded in the first13 three years. Almost none of the 2514 million budgeted for FY11 has been spent,15 and I understand that part of that is due16 to our inability to issue bonds timely,17 and then the FY12 spending has been18 reduced from 25 million to 10 million.19 I really want to -- so the20 question is, are we going to spend 3521 million between FY11 and FY12?22
So what is25 24 3/29/11 - WHOLE - BILL 1101371 the plan to spend that money and where2 will it be spent?3
Well, as I said in4 my testimony, we are actually going5 through a prioritization process with the6 Managing Directors and the Deputy Mayors.7 We know there are certain critical things8 that must be done. We must start to9 build out our data centers that are10 falling apart. We know we must upgrade11 the network speed that we talked about12 earlier. But we've also discovered -- no13 one likes me to say this, but I always14 say that I discovered that when we15 started to do all of this work, we16 realized that it's a little like doing17 renovation, when you start to pull the18 wall down in a room that you're about to19 renovate, you find all the ugly wiring20 underneath of it that has to be replaced21 as well. So one of the things that we22 did was, as we started to do the network,23 we discovered a number of operational24 issues that had to be fixed.25 25 3/29/11 - WHOLE - BILL 1101371 So it is our belief that we're2 going to spend roughly -- prioritization3 is not yet done -- that we're going to4 spend roughly 19 million of those across5 citywide applications, whether it be the6 Procurement system we talked about, the7 OEO, the lobbyists, that type of thing.8 And then we will spend the remaining9 balance on actual hardware infrastructure10 type projects, such as the network and11 servers and data center build-outs, those12 types of things.13
So when you14 say we're going to spend it on15 Procurement and other things like that,16 it's my understanding from the17 Administration that we're going to18 perform workflow process studies first so19 that we don't implement technology over20 very poor and inefficient processes as we21 have done in the past.22
Has that24 begun in the departments that you think25 26 3/29/11 - WHOLE - BILL 1101371 are going to be priorities?2
There's two parts3 to this answer. We have recognized that4 we have a larger project that we all5 refer to as ERP project to put in an6 integrated suite of applications. As7 part of that project, we realize that8 that was a huge project and needed a9 dedicated both director as well as a team10 to manage the various contractors,11 consultants that we end up pairing with12 and partner with. It's a complicated13 project. We have been looking for that14 individual for some time. We've enlisted15 the help of the Private Sector Board and16 we've enlisted the help of recruiting17 firms to get that individual.18 That part has not begun yet.19 So the business process improvement20 necessary for that particular larger task21 is not, but we have been doing ongoing22 business process improvement in a number23 of areas, because a number of the24 applications cannot wait for the larger25 27 3/29/11 - WHOLE - BILL 1101371 system. Sometimes you have to make a2 call to do something smaller ahead of3 time because it's critical. And like if4 you take the property data is a great5 example. We've documented the process of6 data and information and all of that.7 It's a very ugly picture in fact, but8 we've documented that in order to not do9 that in the new system.10
So what14 you're saying is of the 19 million you15 just mentioned, that does not include the16 horizontal replacement of the financial17 and ERP packages of the City?18
It does. I said19 but we have not started in earnest that20 project, because we're looking for the21 leader of that project.22
Okay. And I23 imagine we need that leader and a24 permanent CIO.25 28 3/29/11 - WHOLE - BILL 1101371
So are we3 realistically going to be able to spend4 $19 million on that project and related5 hardware and other -- in other words,6 break down for me how much is fixing the7 network and hardware versus how much is8 part of the ERP/financial package/9 horizontal implementation.10
First part of your11 question is, we will not spend 19 million12 on the ERP project. The prioritization13 is going to tell us what -- we know the14 ERP project will be one of the ones that15 gets started. I'm confident of that. I16 don't know what else. For example, I'll17 give you the cashiering system. We've18 gotten to a point where we know it is19 unstable and it needs to be replaced20 ahead of anything else.21
The system that3 collects the revenue when you come in to4 pay your bills and so forth, that system.5 That is a system that two years ago we6 didn't realize was in as bad a shape as7 it was. That's a system that we figure8 is going to take a couple million of the9 $19 million to get started.10
Now, for11 example, if we're going to use Oracle,12 for example -- I don't know who we're13 finally choosing for the financial14 package and ERP -- we would want to have15 that implemented prior to putting in16 place a new cashiering system so that we17 know we're going to have a fully18 integrated solution, we know we've chosen19 the right product for what you're20 referring to as the cashiering system21 that easily integrates with whatever22 final horizontal, ERP and financial23 package implementation we have.24
So like I2 don't understand how we can spend that3 first before we've decided on the4 horizontal layers, which drive really5 every other vertical decision in6 departments and specific applications7 like cashiering.8
Sure. I can9 address that. If the City of10 Philadelphia were 500 people, it would be11 a no-brainer. In the ideal world, we12 would like -- it's kind of hard trying to13 see you, Councilman Green.14 In the ideal world, we would15 love to put it all in as one integrated16 suite at the same time. The size of the17 City and the complexity of the City, it's18 not possible. So we have to make tough19 choices that may not be perfect, but20 they're smart. And what I mean by that21 is, for example, if we were doing ERP, we22 would not put in the GL, the AP, the HR,23 the Pensions, the Payroll, the 3-1-1, all24 in one shot. It's a recipe for disaster.25 31 3/29/11 - WHOLE - BILL 1101371 Everybody that's tried to do it will tell2 you, you don't do a big bang. So if we3 were going to put in HR and payroll4 first, we would have had to build5 interfaces to the old GL anyway.6 We have a situation here with a7 couple systems, the Procurement system,8 this cashiering system, the systems are9 unstable. They will not last as long as10 it will take for us to put in the whole11 ERP suite. So we have to make a12 management call to spend as little as we13 can in this replacement system to get14 benefit today and over the next year or15 two and then have it plugged in. And it16 will initially probably just be17 interfaced to and five years from now18 maybe replaced with a new one. But the19 strategy is always the minimum you can do20 to get a stable system that meets your21 current needs.22
Right. I23 mean, this is our only opportunity to24 have input in how you're going to spend25 32 3/29/11 - WHOLE - BILL 1101371 that money up front, so what I'd really2 like to see is what you think has to be,3 in writing to the Chair, what has to be4 spent now, what your plan is for the ERP,5 how far you are along in that financial6 package.7
I truly9 think even if we do a small10 implementation at the top level, we have11 to decide what package we're going to use12 so that we can at least choose underlying13 systems that we know easily integrate14 into what our likely choice is.15
Rather than17 having to use third-party providers like18 Mindshare and other stuff to make19 everything talk to each other.20 It doesn't sound to me like21 we're on a path to spend, to go back to22 the beginning of the question, 35 million23 by the end of 2012 if we still have to do24 all the work within the departments and25 33 3/29/11 - WHOLE - BILL 1101371 we still haven't chosen the horizontal2 layers in terms of the financial package3 and ERP.4
Right, but all of5 this 35 million is not going to be spent6 on ERP. ERP is a long spend. It's a7 five-year spend. What we've laid out8 here and what our plans show right now9 is, we tried to budget -- one of the10 reasons we reduced our request for11 capital this year was because we didn't12 think we could spend 50 million.13
That was16 unrealistic, in our eyes.17 In terms of spending the 3518 million, though, we thought that was19 realistic to spend. For example, we do20 not have sufficient system monitoring21 capability within the City to be able to22 respond and know when things break fast23 enough. That, by itself, inside of a24 three-month period once an RFP, proposal,25 34 3/29/11 - WHOLE - BILL 1101371 selection, all of that, that could inside2 of a 90-day period be $2 million. Some3 of these things are fairly4 straightforward to like if you're going5 to put in CA or HP OpenView or any of6 those types of tools, you bring in a team7 who literally set it up, configure it and8 you got a 90-day project. ERP is a much,9 much longer one, because you have to work10 business process and organizational11 change and training 27,000 people. It's12 a much longer process.13
Well, if you14 could provide it to the Chair, because I15 certainly would be -- I certainly16 personally -- I don't speak for anybody17 else -- want to see how you're actually18 planning to spend that money and on what,19 before I would vote to appropriate it.20
Okay. So22 related to that, I think during testimony23 by our Budget Director, we agreed that24 investments in technology should be25 35 3/29/11 - WHOLE - BILL 1101371 measured in terms of productivity2 enhancements rather than sort of hardware3 and software purchased. And so my4 question is, is DOT involved in any kind5 of estimation right now about what6 savings or what productivity increases7 will result from the spend that you're8 proposing over the next couple of years9 and over the course of the six-year10 Capital Plan?11
So much of what we12 are doing are critical things that we13 have to do no matter what, that we have14 not sit down and tried to do sort of an15 ROI, that type of thing that you're16 talking about. I mean, the network speed17 that President Verna spoke of, that's a18 critical thing that even if it was a19 negative R, you would need to do it just20 to be able to do business. So we have21 not set about doing any formal ROI.22
There is an23 ROI for that, though, right? Because in24 Council offices and I'm sure in many25 36 3/29/11 - WHOLE - BILL 1101371 offices across the City, people are2 waiting for documents to download,3 they're waiting for access. So there is4 huge time waste because of our5 inefficient Internet access. So there is6 probably a positive ROI on that spend.7 You can measure an ROI, and we should for8 every project that we're going to spend9 real money on.10
You asked me were11 we engaged in any ROI, and the answer is,12 no, we're not yet engaged in any of13 those.14
Okay. Well,15 Councilman Kenney introduced a bill the16 other day which would require a17 cost-benefit analysis, and I have a bill18 that's about two years old which would19 require a cost-benefit analysis for all20 capital expenditure. And so I think21 you're going to see one of those as law22 by next budget time. So I would suggest23 that that's how the department begins to24 think about spend.25 37 3/29/11 - WHOLE - BILL 1101371 I have many more questions, but2 I'll yield and come back in the next3 round.4 Thank you.5
Thank6 you very much.7 The Chair recognizes Councilman8 Jones.9
Thank you,10 Madam President.11 And I understand that it is12 both Bill Green and Bill Greenlee's13 birthday, and as a birthday present, let14 him talk as long as he wanted.15 Happy birthday, Bill.16 A couple of quick questions.17 Number one, I took out the testimony from18 two years ago before it was the19 Department of Technology, when it was20 MOS, and I started looking down at the21 testimony, and then I read yours again.22 And it is very, very similar, yet I'm23 going to go micro and then macro on this24 issue.25 38 3/29/11 - WHOLE - BILL 1101371 Micro, my eight-year-old2 granddaughter can get on the Internet3 faster than I can using our system here,4 that Fred Flintstone probably used that5 Dell computer we have.6 We need to be able to access7 information in a realtime fashion so that8 we can make good decisions for the9 citizens of Philadelphia. It is not to10 play games on it. It is not to check my11 Facebook, because I have my own12 technology to do that, but my staff have13 to be able to research legislation from14 around the world to look at best15 practices. Without that, we are woefully16 unarmed to make the decisions to be the17 stewards that we need to be.18 We introduced a resolution a19 while back. I cannot remember the number20 of it. Here it is. It is Resolution21 090368, calling into question how we can22 get a better system here, and we have yet23 to achieve that goal.24 So what I'm saying to you is,25 39 3/29/11 - WHOLE - BILL 1101371 we need some help on that. We need to2 look at whether it should be in the3 clouds or in a mainframe or in a local4 area network. I really don't care. I'm5 an end user. I push the button and I6 want the information.7 So just from our small micro8 involvement with technology, we are9 frustrated. And I'm pretty sure that if10 we introduced a resolution tomorrow to11 get money from your budget to solve our12 own problem, I could get nine votes. I13 believe that. But we want to work as a14 team with the other departments to be a15 part of a larger question that we want16 you to solve.17 So having said that, we're18 going to look forward to you solving this19 problem. I've looked at the testimony.20 I'm still a freshman, but I can read. I21 remember what was said the year before,22 the year before that, and I'm saying to23 you that we are growing impatient with24 it.25 40 3/29/11 - WHOLE - BILL 1101371 Other legislative bodies, for2 example, have laptops and computers right3 at their desk. And I know these4 budgetary times we should not -- but a5 plug under here would help that we6 could -- technology? Electricity. So7 that we could plug into independently8 acquired technology to upgrade and be9 able to do that. These are simple things10 and simple solutions.11 The other bill that I would12 bring your attention to -- and I read13 your testimony where you looked at14 different RFPs, where you actually did a15 review of the technology and said that16 this Solution A is better than Solution B17 and, therefore, we think we should18 restructure and do it this way.19 Do you do that often? When a20 department says we want to solve it21 through these series of hardware,22 software solutions, do you evaluate it23 and then offer alternative strategies?24
We do. I was25 41 3/29/11 - WHOLE - BILL 1101371 trying to think off the top of my head2 some of these things I go through, but we3 try to take every potential option for a4 department in consideration, and it's a5 difficult job because of where our6 current infrastructure is and -- for7 example, one of the departments was8 looking at -- well, two departments was9 looking -- actually, three was looking at10 an IVR system, and so we said rather than11 buy three separate systems --12
I'm sorry. The15 integrated voice recording, the voice16 response, 3-1-1, L&I, Revenue.17 So we were looking at what they18 were -- evaluating what they were looking19 at to see how we would put it together to20 be a single solution that would be21 cheaper and more sustainable for the22 City, yet still meet their needs.23
Did you24 realize cost savings based on that25 42 3/29/11 - WHOLE - BILL 1101371 analysis?2
Can you5 document, just roughly, not to the penny,6 how much did you save the City of7 Philadelphia by doing that type of8 calculation and analysis?9
I would say it's17 probably in the tens or maybe even18 hundreds of thousands. These systems are19 expensive.20
All right.21 And I think and applaud you for that type22 of analysis.23 Resolution No. 100848 is asking24 and begging that all City departments25 43 3/29/11 - WHOLE - BILL 1101371 review contracting in, contracting out2 and whether those solutions could be done3 by internal staff or whether or not it is4 better to contract out with someone who5 has -- or an entity, a firm, a company6 that has a higher degree of knowledge and7 expertise in an area. So you do that on8 a regular occasion?9
Yeah, we do it on a10 regular occasion, because sometimes --11 there's two parts to this answer, or more12 than two, actually. We take a look at13 what our staff can do, and our staff --14 we have to factor two very important15 things in. First one is skills, and16 second, we have to keep the day-to-day17 running, and even though some may not18 feel like we keep it running perfectly,19 that's what our staff's primarily duties20 is, to keep it running. So sometimes21 it's a matter of we just need the22 additional capacity for a short period of23 time as we put it in.24 It is our, the executive team25 44 3/29/11 - WHOLE - BILL 1101371 in place today, it is our strategy to2 always make sure when we do that, we3 integrate our current staff in both4 either with skill sets they currently5 have or as part of the contract, for them6 to be trained to attain skills. We know7 we don't have -- the department don't8 have --9
Again,10 Resolution No. 100848 calls for11 departments like yours to do that12 analysis, and what you have testified13 here today is that has resulted in a14 decision that says whether to keep it15 in-house because it's cheaper, more16 effective to do it or to contract it out17 because we don't want to tool up in that18 way long term, which is a basic analysis,19 which has saved taxpayers' dollars. Is20 that your testimony today?21
All right.23 I'm glad of that. And future departments24 that are about to come up; in particular,25 45 3/29/11 - WHOLE - BILL 1101371 the Procurement Department, we want more2 of that.3 As we look at the -- how4 much -- and two things. I'm going to let5 my colleague Wilson Goode ask you about6 subcontracting opportunities and things7 like that, because I'm sure he's going to8 pursue that line of question. So I will9 defer that, but by way of use of10 technology, which is something that my11 colleague Bill Green has long been an12 advocate for, how much have we saved by13 converting, using technology, converting14 from paper to electronic transfer of15 data? Have we documented what those16 savings have been?17
No, Councilman18 Jones, we have not documented those19 savings.20
In order to23 document those savings, you would have24 needed to initially have done a baseline25 46 3/29/11 - WHOLE - BILL 1101371 of what it was costing you. That, in and2 of itself, is a project, and to date, we3 have not done it. I'm not going to tell4 you -- I can't answer why we wouldn't do5 it ultimately. That's what we want.6 We have been on a path, the7 Division has been on a path, of trying to8 get the technology in as fast as we can.9 We have so many clients such as yourself10 who tells us how desperately they need11 it, that we just haven't taken the -- we12 had not taken the additional step of13 documenting the savings.14
I think you15 probably will have a positive story to16 tell. Now, you're going to have certain17 inefficiencies because breaking down all18 of the silos that I see in your19 testimony. I get that. But when you20 make a major transformation, it is21 important to this body and probably more22 important to the Chair of Technology over23 there that we start to create that24 baseline so that we can say we're moving25 47 3/29/11 - WHOLE - BILL 1101371 in the right direction for a number of2 reasons. One, because the end user, the3 citizen, is convenienced by the use of4 technology, but the City of5 Philadelphia's budget is in fact impacted6 positively by the use of that technology7 and, therefore, the original expenditure,8 equipment, personnel, training, software,9 all made sense.10
So we're12 going to -- you're the new guy and you're13 the only one probably newer than us, but14 we want to look at that baseline and15 measure going forward what those16 technological impacts are on our budget17 and our improved service delivery.18
Thank you,20 Madam President.21 COUNCIL PRESIDENT VERNA:22 You're welcome.23 The Chair recognizes Councilman24 Greenlee.25 48 3/29/11 - WHOLE - BILL 1101371
Thank2 you, Madam President.3 Good morning, gentlemen.4
Good morning.5 COUNCILMAN GREENLEE:6 Mr. Jones, one of my questions is going7 to be similar to what Councilman Jones8 had asked you. And I know you've only9 been here a couple months, but I10 understand that there's been a lot of11 discussion about Council getting its own12 server. It's apparently been promised.13 Can you give us any kind of timeframe on14 that?15
I'm not quite16 sure I fully appreciate the question. We17 have talked to -- Council has its own IT18 staff that maintains all of your PCs and19 internal operations, and we've talked to20 your folks, your administrative lead,21 about what it would take to do a number22 of things, like to separate you23 completely, to give additional servers.24 We have discussed what those numbers25 49 3/29/11 - WHOLE - BILL 1101371 were, and the decisions were made at the2 time that that was not cost effective for3 you.4 Now, when I say I don't5 quite -- I don't know what server you're6 talking about. My apologies. The7 biggest issue has been so far was the8 network speed and the impact of having9 everybody log in together. We literally10 just met with a lot of your staff members11 yesterday and walked through all of those12 issues. We, as I said earlier in13 testimony, we are driving very hard to14 try to get that Internet speed problem15 resolved, we hope, fingers crossed,16 within the next 60 days, but there are17 always those issues that we can't18 control.19
I20 understand. Okay. I appreciate that.21 One other question. Do you22 manage the BRT website? Is that23 something you do?24
It just sits on our25 50 3/29/11 - WHOLE - BILL 1101371 site. External folks manage it.2
Because I3 understand there's been a particular4 problem accessing that, and that's a5 place where we go a lot.6
The BRT? I'll look7 into that and get back to you,8 Councilman.9
I10 appreciate that. Thank you.11 Thank you, Madam President.12 COUNCIL PRESIDENT VERNA:13 You're welcome.14 The Chair recognizes Councilman15 Goode.16
Thank you,17 Madam President.18 Good morning, Mr. Jones.19
I note from21 the budget you have about $40 million in22 purchase of services and about $4 million23 in materials, supplies and equipment.24 Can you first explain what the $4025 51 3/29/11 - WHOLE - BILL 1101371 million is for?2
Oh, okay. In Class14 200, we purchase software contracts to15 maintain the systems. Like, for example,16 the Pension system runs from a company,17 it's a base system company, called18 Software AG. Just like you get Windows19 updates on your PC when there are20 patches, we purchase maintenance21 contracts from companies like that, sort22 of as an insurance.23 We also purchase a number of24 contracts where we are trying to rebuild25 52 3/29/11 - WHOLE - BILL 1101371 the ePayment system for the City. We2 didn't have enough capacity from some3 technical skills and so we added to, we4 augmented our current staff with those.5 So we have a joint team.6
So you7 intend to spend about $42 million on8 purchase of services?9
What's the11 largest contract you will award in Fiscal12 Year '12?13
Yes, it's a18 competitive contract. It's in its fourth19 year.20
So there21 would be other people who will bid other22 than Verizon?23
That's Motorola for7 lease payments for our radios and so8 forth.9
Verizon,14 yeah. The largest contract is Verizon.15 How much is that contract for?16
Across all funds,17 Water, Aviation, General, it's about $1518 million.19
So Motorola is22 really, we think of, as two. There's an23 $8.4 million payment, lease payment, we24 make and then there's a $3.6 million for25 54 3/29/11 - WHOLE - BILL 1101371 radio maintenance for all the emergency2 radios.3
Just to be clear,9 the 8.4 is just for payments. It's10 not -- it's a lease payment. So it's not11 renewable. We make the four payments and12 we're done.13 The Motorola one was just14 started last year. It's in its first15 year.16
Does Verizon20 subcontract with disadvantaged21 businesses?22
Are there24 subcontracting opportunities within the25 55 3/29/11 - WHOLE - BILL 1101371 contract?2
None that we know3 of. It's all their personnel that we4 know of.5
We don't know of8 any subcontracting that they're doing on9 behalf of the City to support the City10 contract.11
But you know12 what you're purchasing, so are there13 subcontracting opportunities within what14 you're purchasing?15
I'm only hesitating16 to answer the question because the17 services that Verizon provides to us is18 all our data communication, all our19 connections --20
I'm sorry. The23 services they provide to us are very24 unique and specific to what they do in25 56 3/29/11 - WHOLE - BILL 1101371 terms of their contract. They're2 providing the voice, the data. They have3 their technicians on staff. Whether or4 not they could contract -- teach other5 companies their systems, I don't feel6 comfortable answering.7
So I'm8 assuming there was no participation goal9 within the RFP?10
There were11 participation goals in the RFP when it12 was put out.13
So how is18 that 10 or 15 percent goal supposed to be19 met?20
Councilman, they21 had listed in their proposal where they22 had subcontracting opportunities, it was23 really around small cabling jobs and it24 was around small services that if they25 57 3/29/11 - WHOLE - BILL 1101371 had --2
Okay. So7 there were goals within the RFP. Were8 there goals within the actual contract?9
The details that10 you're asking, I'm not prepared to answer11 today. I would like to get --12
That's13 actually somewhat disturbing. I've made14 it known that I'm asking the same15 questions every department, and rather16 than just deal with what the overall17 goals for the department was and whether18 you're meeting those goals, what I'm19 choosing to do is look at the largest20 contract and walk through the process in21 terms of what's actually happening.22 So I asked the question what's23 the largest contract. You said Verizon.24 It's a $15 million contract.25 58 3/29/11 - WHOLE - BILL 1101371 I then asked the question how2 long have they held the contract. You3 said since 2008. It's a renewable4 contract.5 I then asked whether there were6 subcontracting opportunities. At first7 you said there weren't and then you said8 there were. Then you identified those9 opportunities. You said within the RFP10 there was a 10 to 15 percent goal.11 I asked was that goal within12 the actual contract. You said you don't13 know.14 So you don't know whether15 Verizon, which was responding to an RFP16 with a 10 to 15 percent goal and which17 may have received the contract with a 1018 or 15 percent goal, is actually living up19 to that obligation or not. I don't20 understand how you could not know that.21
I appreciate your22 frustration. That contract was put out23 in 2008, and I don't personally know24 that. I should. So I can only apologize25 59 3/29/11 - WHOLE - BILL 1101371 to you at this table. I can get this2 information to you.3
Please4 forward that information through the5 Chair. But part of what I expect this6 whole process to reveal is that as long7 as you have renewable contracts, no one8 is probably looking at the contract as9 long as the goods and services are being10 provided, so there's not going to be any11 increased participation. No one is going12 to go back to the vendor and ask for13 something different. But that's what's14 supposed to be happening.15 And also if you're not bidding16 it every year, to some extent it may keep17 you from having to go back to Council in18 certain ways by doing three-year19 renewals, but at the same time, we don't20 know that you're getting any efficiencies21 out of it. You could actually get lower22 bids coming in if it's a competitive23 process.24 So there's going to be a lot of25 60 3/29/11 - WHOLE - BILL 1101371 questions about, particularly when2 Procurement comes up, about what3 percentage of our contracts are actually4 renewable contracts, because that may be5 a major problem in terms of both cost6 savings and cost efficiency. And it may7 work that renewable contracts are more8 cost efficient, but don't provide cost9 savings. But it definitely -- in terms10 of the issue of disadvantaged business11 participation, if the deal you have with12 someone is 10 to 15 percent, it shouldn't13 just be in the RFP, it should be in the14 contract, every year you should know what15 they're producing.16
Councilman, we17 agree. That's one of the reasons we are18 personally excited about the OEO system19 that we're trying to stand up, because it20 will allow us to track those kinds of21 numbers and assist not only DOT but each22 department in tracking that, and they are23 very important to us.24
Last25 61 3/29/11 - WHOLE - BILL 1101371 question I will ask, last series of2 questions. Is Verizon in compliance with3 the City's living wage and benefits4 standard?5 If you don't know, just say you6 don't know.7
Then please9 forward that information through the10 Chair.11 Thank you, Madam Chair.12 COUNCIL PRESIDENT VERNA:13 You're welcome.14 The Chair recognizes Councilman15 Rizzo.16
I have a25 62 3/29/11 - WHOLE - BILL 1101371 couple questions here, and if they've2 already been addressed, I was distracted3 there for a minute. I don't want to4 duplicate and take up time.5 I want to go back to that point6 that you made earlier, Mr. James, about7 the electric service that was paid to8 PAID for the transaction that involved9 the purchase of the WiFi. Last week I10 asked you a question about what did that11 transaction cost. Was that number12 included in that number that you gave me?13 I think you said somewhere 2 million14 maybe.15
I gave you the --16 Councilman, I gave you the $2 million17 cost for the acquisition. That's the18 number I gave you the last time we had a19 conversation regarding it.20
It was in the23 Operating Budget. You see there was a $224 million payment out, which was a one-time25 63 3/29/11 - WHOLE - BILL 1101371 payment, which is not reflected in the2 budget going forward. That was the3 acquisition cost. I think it was 1.54 overall, but overall it was $2 million.5
The acquisition12 cost to purchase was 2 million, and I13 believe I told you that the run rate runs14 around $900,000 a year. It's in our15 Operating Budget. I think with some of16 the increased electric costs, it's a17 little over that, but that's the numbers18 that we were just talking about earlier19 between PAID and PECO, those electric20 charges in the leases.21
Okay. Good.22 Let me go over these three issues, and,23 again, if you've already addressed them,24 I apologize.25 64 3/29/11 - WHOLE - BILL 1101371 Code 209 indicates a 1,261,0002 increase for purchases of service3 identified as telephone and4 communications. Can you provide a5 breakdown of this figure that describes6 the nature and necessity of these7 services, please.8
Councilman, are you9 referring to the Class 209 for Verizon,10 $1.2 million increase?11